..Stakeholders demand tax harmonization with VAT

By Prince Osuagwu (Hi-Tech Editor), Jimoh Babatunde & Monsuru Olowoopejo 

GOVERNOR Akinwunmi Ambode of Lagos State has lamented that hotels, eateries and restaurants in the state have not been duly remitting consumption tax collected into the state government coffers, causing the government to lose revenue annually.

Akinwunmi Ambode

Ambode expressed dissatisfaction with the development, yesterday, while unveiling the automation processes of collecting the Hotel occupancy and Restaurant consumption regulation tax at a stakeholders meeting with owners of hotels, restaurants, bars and event centres in Ikeja Lagos.

He warned that non compliance to the consumption tax regulation and automation process of collecting the revenue will pit the hoteliers against the law.

Reacting, Hoteliers reminded the state government that imposing another 5% consumption tax would mean double taxation considering that the Lagos state government also has a share in the Value added tax, VAT, that they pay.

Ambose said that “a critical overview of this particular line of tax shows that there has been high level of under-payment and non-remittance of what is due to the Government. The objective of this regulation is to allow the state put in place efficient machinery to enhance the collection process and ensure compliance in the state.

“The automation of processes and leveraging on technology are key to the development of any nation and that is what the fiscalization project which formally commences today has come to address in Lagos,”

The governor stressed that non-remittance of the tax collected from consumers was responsible for introduction of automation of consumption tax, in line with the state Hotel Occupancy and Restaurant Consumption (Fiscalization) regulation 2017.

The governor, who was represented by his deputy, Dr. Idiat Adebule, hinted that the overall objective was to rely less on the Federal Government and more on internally generated revenue.

He said: “To enable us achieve the target we have set for this year, we required commitment from all residents and business owners in payment of their taxes.”

While warning hoteliers, event centre proprietors and others in the sector, he stressed: “You must allow the integration of their systems along with the Lagos Internal Revenue Service, LIRS, server to facilitate the monitoring of consumption tax transaction and remittance of same to the state.”

Meanwhile, hotel owners and restaurant operators in the state, while reacting to the government, demanded that the state government immediately harmonize the Value Added Tax (VAT) and the Consumption tax, saying that collection of both is double taxation.

Some of the associations that spoke at the meeting included the Lagos Hoteliers Association and Association of Fast Food Confectioners of Nigeria, AFFCON. They argued that harmonization of both taxes would not only reduce burden on them but also the consumers.

Speaking on behalf of the stakeholders in the sector, President of hoteliers in Lagos, Prince Adekunle Akilo, said: “The law should be fair to the stakeholders. We believe that after paying 5% VAT and you are asking us to pay another 5% consumption tax is double taxation. It is apparently complicating and duplication of the law.

“It is good that you want to collect consumption tax but the state should have liaised with the Federal Government to exclude Lagos from states paying VAT. With this, the state will only collect consumption tax and pay the federal government certain percent from it.”

However, Lagos state government said the law has been passed and must be complied with, considering that the state needed money to continue with adequate provision of social amenities, including good roads, electricity, security and other infrastructure which the Ambode administration has made cardinal.

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